Lauren:
Hello everybody this is Lauren Cohen, international lawyer and real estate expert reporting to you from my almost new podcast, Investing Across Borders. I am here today with my guest and dear friend Dave Dubeau. Dave, I am so excited that you’re here really on so many levels we have really been trying to get this to happen for a while. We connected through our lovely esteemed friend Mike Wolfe, who is indirectly responsible for so many relationships in my life, and I will say one thing before we start – the silver lining of COVID for me has been relationships like those that I’ve developed with Dave, because we met a during an event during COVID, I don’t think Mike would ever have done the events he’s done if not for COVID because he moves all over the place. He’s never stationary, and I think Quynh Voh talked him into sitting down and getting things going. And so, Dave, I appreciate you being here. Please introduce yourself and tell us a little bit about your five-step money partner formula, I mean you have an amazing product that everybody needs.
Dave:
Thanks Lauren so I’m a real estate guy and a marketing guy and fellow Canadian as well – as you’re enjoying the sunshine down in the States. So that’s all good. Real Estate – I’ve been doing that, pretty consistently since 2003
Lauren:
Are all of your real estate investments so far in Canada? Is all of your real estate work so far, like, investment-wise in Canada?
Dave:
You know what, I actually started dabbling a little bit when I was living in Costa Rica. I lived down there for a decade. From ‘93 to 2003 and I did a few what would be called pre-foreclosure deals.
Lauren:
Lots of those coming up on the market right now.
Dave:
Yeah, this was in Costa Rica so it was limited, a little bit different but it was an eye-opening experience and I moved back to Canada with my Costa Rican family. So, really, I started all over again from scratch. In a brand new city. I’d been gone for so long that I didn’t have bad credit – I had zero credit, and I hadn’t been able to sell my business in Costa Rica so I didn’t have a lot of money and we went from this nice upper-middle-class with maids and gardeners – to living in a crappy little town – I was on the wrong side of the tracks here in the city that I live in.
Lauren:
Where were you before Costa Rica – in Vancouver?
Dave:
I grew up on the West Coast in northern British Columbia.:
Okay, so then did that. So I started all over again from scratch and it’s kind of like trying to figure out what I am going to do. Because Lorna’s as I think you could probably relate to, by this time I was self-employed for so long I was pretty much unemployable and I really didn’t want to punch the clock for anybody else. So I was getting stressed out. I was under a lot of pressure from my wife at the time. Now my ex-wife. She was kind of persnickety and used to doing the better things in life, so living in this situation was stressful. So I had to figure out what I was going to do and I don’t know if you remember but I remember those late night, real estate infomercials that used to come along at one o’clock or two o’clock in the morning.
Lauren:
And they said you too can get into real estate with little or no money, the tough words right.
Dave:
I said perfect because that’s exactly what I had. So I sent away for this course from a fellow who lives not too far from where you are in Florida a gentleman named Ron Legrand and was quick-term real estate and was all American stuff and I’m in Canada, so I had to kind of translate it to my Canadian eyes, but I did put it into play. And I did 18 creative deals in 18 months that was a big deal.
Lauren:
Wow, for somebody that had no money. That’s an amazing thing.
Dave:
They weren’t all great deals, bottom line got very very into real estate investing and got very good at attracting motivated sellers, doing creative-type stuff and caught the eye of an up-and-coming real estate guru up here kind of the Canadian version of Robert Kiyosaki – Rich Dad – very closely associated with Kiyosaki actually, and caught his eye because of what I was doing in real estate. Plus, with my marketing background I came on board as the marketing director for his group of companies, and helped him go from working out of his basement office with one employee to seven branch offices, 128 employees and above $100 million a year in revenues, I worked there for about six years. And that was fun and I got passionate about teaching and training and reading a few books about marketing and real estate and all this kind of stuff.
Lauren:
How many books have you written? Like 5?
Dave:
No 8.
Lauren:
Oh, I see. I thought they were duplicates behind you. Wow!.
Dave:
That’s the one that’s missing there, my very first one that I’m not that proud of so I don’t put it up. And, anyhow, it was a great experience. I took a little bit of time off of real estate investing, Jumped back in in 2010, started doing what’s called tenant-first rent-to-own. Are you familiar with that, Lauren?
Lauren:
No.
Dave:
Rent to own and you have probably heard of rent to own or lease. Yeah. So this was basically where we found a really good tenant buyer. Somebody who couldn’t quite qualify right now but with some babysitting could qualify in the next two or three years. And then we go out and buy them a house and lease that back to them with the option to purchase so very, you know, interesting strategy very good in an upmarket not very good in a down market but anyhow that’s a different story I got into that sell finance my first couple of deals like most people do. And then what happens everybody, I ran out of cash and ran out of credit. And of course that’s when the perfect deal landed in my lap, and I remember the saying “just find a really good deal and the money will find you”.
Lauren:
It’s kind of like “if you build it they will come” – like that saying
Dave:
So I have this great deal but I knew it wasn’t going to magically land on my lap, so I thought I’m going to have to do something different
Lauren:
oh my god that’s an old phone wow I haven’t seen one of those for a while.
Dave:
I start dialing for dollars, like dialing for dollars cold calling, so I tried that. And I sucked at it to be perfectly frank with you and I didn’t do a hell of a lot of it because my fragile little ego, couldn’t handle all the rejection fluctuating, you know, stop doing that fairly quickly then I also remembered Hey, go out and turn every conversation into a real estate conversation go out network, schmooze, use your 30-second commercial or whatever they call it. So that okay that one didn’t come natural to me either, but I did it and I went out to the Chamber of Commerce, a group of people every day would let you go in with my little stack of business cards, you know, schmooze up a storm and raised zero capital. Like this.
Lauren:
You got rid of some cards
Dave:
I got rid of some cards, turned a lot of people off. And then, you know, I was getting desperate because time was running out. I had two weeks to, you know, remove subjects on this deal so I came up with a brilliant, brilliant idea. I said, This is such a good deal if enough people just saw it. This deal would sell itself. Right, that’s what I told myself so I spent some time putting together a nice little PDF. And I emailed that out to everybody I knew everybody I could think of 200 people at the time. I emailed that out. And I was excited Lauren because I started getting these emails coming back to me. I was excited, up until the moment I clicked, read, I clicked, you know, opened up the emails, and then what I saw was a whole bunch of people saying, Hey Dave I haven’t heard from you in five years or haven’t heard from me in eight years or one case, 18, years. And here you are hitting me up for cash.
Lauren:
You want money. Right, exactly. Take a hike. Get lost, buddy.
Dave:
Get lost. Exactly. So what I succeeded in doing was learning a very painful lesson. Obviously I lost that deal. I turned off and ticked off my tenant buyer big time ticked off the seller ticked off the realtor ticked off the mortgage for everybody. And I’m going to kind of a small city so I had some serious egg on my face for a while. But that was a wake up call that’s when I said you know what, I never want to be in this position again. This old school salesy way of raising money sucks for me I don’t want to do that, that ‘s the wrong positioning. It just you know it makes you look like you’re desperate.That’s right, never good.
I was talking with somebody this morning. And the most important thing that you can bring to a table is energy. And if your energy is that desperate energy. Nobody is going to work with you because they’re going to sense you’re desperate and wonder why, no matter how good you are, what you do, no matter how good the deal is either no matter how good any part is they just don’t want to be in your space, they don’t want to be in your energy, they don’t want to share that, like that creepy guy at the bar right the guy in the bar that just repels every woman that he approaches. Same idea when you’re desperate for money like that. You really do turn people off so of course I said you know what I don’t want to go through that again that sucked. And then I gave my head a shake and I said, why are you doing it this way you know if you think about marketing.Why don’t you figure out a way to turn the tables, why don’t you figure out a way to attract investors to you instead of desperately creepily chasing after them. So, by hook or by crook through a lot of trial and error, I came up with what I call my five step money partner formula. So that’s a very long background story, but that’s, that tells you a little bit about me.
I applied this raised hundreds of 1000s of dollars for my rental deals when I was doing that around 2013 2014 switched over into multifamily investing raised millions of dollars from my own deals. Following this process, but more importantly about five or six years ago now. I started teaching and training other people about how to do this and. And nowadays actually what we have is we have a boutique marketing agency, and we actually help. Real Estate entrepreneurs, put all of this into play.
Lauren:
Do you have a certification program also?
Dave:
Not at all.
Lauren:
You just train them in how to use your model.
Dave:
No, actually, what we do is we train people on how the whole model works, and then we offer to do it for them, because I know you’re busy. A lot of our clients are still working. They’ve got families. They’re self-managing their portfolios. They don’t want to learn a whole other skill set, they don’t want to be putting together websites and marketing campaigns and investor presentations. It’s a whole new thing they don’t really want to figure out themselves so they hire us, and we do all that stuff for them and basically just put them in front of investors having investor meetings. That’s the end goal.
Lauren:
Do you partner with them, or are you actually just providing a service?
Dave:
These days, I realized years ago Lauren I kind of suck as an active real estate investor, I mean I enjoy the hunt, I enjoy putting the deal together that kind of stuff. But I don’t enjoy dealing with tenants and toilets. And I have actually partnered up with a couple of my clients who have different types as well different types.
Lauren:
So it just depends.
Dave:
It depends. Yeah.
Lauren:
So, how does this work so you’re in Canada, and I’m in the US, and I want to raise money. How do you use it ? The same model for U.S. folks or is it different?
Dave:
you know what it is now, you’re gonna appreciate this Lauren because you’re a lawyer, so I gotta cover my butt. I’m not a lawyer. I’m not an accountant, I’m not a securities specialist, I’m a real estate guy and I’m a marketer. So what I’m going to share with you is my understanding of things and Lauren, you can fill in the blanks and you can correct me
Lauren:
I’m not giving legal advice on this podcast.
Dave:
There you go, but I’ll cover the idea, the whole process is the same no matter where in the free world, right where there is for people where there’s money.
Lauren:
And there’s people, and there’s people that need the money
Dave:
Right and there’s people that have the money, right so the philosophy, the big picture philosophy is a couple of things. Number one, when it comes to the chicken and the egg which comes first, the money or the deal. I always recommend having the money first and what do I mean by that. I don’t mean that you’ve got a whole bunch of people who’ve written a check for 50 or 100 grand or whatever I mean, have a group of investors ready to go. lined up in the waves, right. So you’ve got your bench of investors eagerly waiting for you to bring a deal to the. Now, you might have the pre qualification, they might. They might have signed off on an expression of interest, something like that so you know they’re serious. And then the other thing is always have more capital lined up than you think you need that so that way by the time you got the deal of the smoke clears you you’ll feel comfortable that you can actually close in case somebody bails also
Lauren:
in the process that’s gonna happen. I’ve been writing business plans for a long time. And I always tell clients, there’s different types of business plans but those that are related to raising capital. I always tell clients, double what you need, because you might get what you’re at, you’ll go double what you ask for because you might get what you actually need. And, you know, it’s the same when you’re doing a securities document or there’s, you know, there are job creation thresholds, you have to add a cushion because you know that stuff, we’ll just call it stuff happens and you know that, as well as anybody you’ve had it happen a few times.
Dave:
Exactly. Yeah, it does happen, so that’s big idea number one second big idea for people to keep in mind because a big mistake I see new capital raisers making a lot, is they think any everybody and anybody with a pulse and a checkbook, is a good prospective investor. Nothing could be further from the truth. And I put the deals up on Facebook and on social media and all this stuff. Bad idea for two big reasons. Reason number one is just logic right so for somebody to invest 5075 100 grand or more with you, they’re going to need to know you like you and trust you. Right. It just makes sense that’s just logical, a complete stranger doesn’t know you certainly doesn’t like you certainly doesn’t trust you with their mining so you’re starting from scratch so that just doesn’t make any sense. And then the second big thing is, you know, then it’s a big no no with the Securities and Exchange Commission with the provincial securities regulators here in Canada with your state regulators in the States. This is a big big no no, because they’ve got these entities that have been created to protect the general public, from unscrupulous con artists right so that’s that’s a good thing. And now, these securities regulators say that you and I as capital raisers need to either be licensed to do this or think a stockbroker would be an example and mortgage broker might be an example person would be an example, these kind of folks can legally get capital from strangers right they’re allowed to do that. You and I aren’t unless we get a license or unless we set up a specific legal structure which you can definitely talk about certain kinds of corporate structures and these sort of things. However, there are some certain exemptions here and it kind of depends on how you’re going to be structuring your deal. If the partner bring on board is going to be more of a joint venture partner is a little bit more active in the deal bringing capital and credit, that sort of thing to the, to the table versus just money so again you need to get the appropriate legal advice about how you want to be structuring your deals but here’s the big idea. The big idea is, if we know that, you know, people need to know us like us and trust us to invest with us. Why don’t we start there first, why don’t we start and raise capital bring investors on board, who we already have a pre existing relationship with, right, so let’s reach out to friends, family members, co workers associates people that we know, and who know us right so that’s step number one this whole five step process is, let’s create a target group of prospective investors and focus, everything on those folks first. All right. So, what I always recommend my clients is, let’s try and come up with at least 150 to 200 people that you have that pre existing relationship with my whole list at the beginning I thought it was anyhow, and everybody you know when I teach this when I show people this, they always go, Dave, I don’t know 200 people, like, Lauren you sure as heck do your very well.
Lauren:
Exactly, normal human beings, it’s a bit of a stretch.
Dave:
Yes. What I always say is you actually know a lot more people than you think you do. Take your cell phone, take a look at your contacts, scroll down below the Z to the number sign Zed if you’re Canadian. And that will surely export them all out of your phone, don’t worry about filtering yet, get all your contacts from email contacts, export them into an Excel spreadsheet get them all in there, get your social media contacts get them get everything everybody from everywhere, into one place an Excel spreadsheet. And then, instead of having to think up 150 or 200 people, quickly whittle it down from let’s say 2000 people, to a couple of 100 people. So you see a name of a face pops into your mind and you, and you like that person. Keep. Maybe you see a name you have no clue who the person is delete. Right, that’s, that’s the first, the first run through there, right and then pull it down. All right, so that’s how we came up with this first target group of prospective investors. Now let’s say you’ve got 200 people in that group are all 200 people going to invest with you. Of course not. Right. The thing is, my experience has shown that most people within that initial core group have access to between 500,000 and a million dollars in capital, and this is a good place for most people to get started? And this is why I recommend this is a good way for most capital raisers to get started with raising capital. So we create that target group. Now the second part, very important. Lord, we want to avoid the dumb mistake I made, which is rushing in like a bull in a china shop saying hey it’s Dave, I got a deal. Yeah, it doesn’t go over too well not very couth, as my mother would say. So here’s what you want to do instead of what you want to do. You want to break the ice, you want to reconnect with them, you want to do what I call a very simple warm up campaign. We can do this simply by email right so if you got 200 people. You can set these people up in something like an email autoresponder, you know, so you can you can communicate with everybody all at once you create one email, send it out to all 200 people, all at the same time. And then the warm up campaign is very simple. It’s just catching people up on what you’ve been up to in the family been up to for the last three four or five years very very personal. Nothing pitchy, nothing. You know, really overtly real estate focused they’re just really have a genuine reconnection and then at the end of the message is well that’s what I’ve been up to. How about you, please reply to this email and let’s catch up, and then you’d legitimately have some back and forth with people, because there’s money in those reconnections are definitely Absolutely, it’s all relationship capital is the number one for me for sure. For sure. For most people, especially, especially now, because we don’t have that human touch or that human interaction, and if you like the people that are just. This just isn’t genuine or authentic
Lauren:
There you can see right through it, even on zoom. They are there I mean you can see they’re just like on the side pitching like those people, I have a guy here in South Florida, and he’s an insurance guy I’m not going to say his name but I would go to events, and literally he would stand at the back of the room, handing out his card, nobody knew who he was, but he would just tender this card like constantly, and it was like, I’m like where’s the relationship there. I was going to address something that you spoke about. So I’ve been writing business plans as I said for a very long time. And in that process when we were doing a business plan for capital raising we would go through much the same process of creating a list, going through it, eliminating people, delete key delete key, and we went I had three pockets one was strategic partners, strategic investors and just money. The money was the least favorite. Okay, because it’s kind of like, like you said, it’s just money, which is great. If you’re desperate, but the strategic investor and the strategic partner, are the ones that are going to be those relationships with you going forward, and a strategic investor like having Dave being an investor, whether it be in terms of services or in terms of in terms of fun, not capital, having me being an investor in terms of the structure of the business in terms of helping you find the right properties. Those are the strategic investors that may bring money to the table, but they also have the strategic partner component. And I think that that’s what what comes through and what you’re saying is that you whittle down your list until you get to those strategic investors that can also potentially be your strategic partner that can promote what you’re doing, cross promote which we talked about before we got on because it’s not just one way it has to be two way. And I used to feel like I’m, you know, last year around this time was the marketers cruise and I know you know if the market is present. Like, like in person. And so, there’s all these people in this marketers cruise 400 people, and everybody schmoozing with everybody. And there’s influencers and there’s newbies. I was like, I didn’t even know where I fit in that. But the deals that were being made, honestly, Dave and today there’s actually a catch up today with the marketers cruise because obviously no marketers cruise this year. But it’s interesting how those relationships that were built on that cruise ship are going to continue through years and years and years and the deals are going to continue for years and years because it’s based on the relationships.
Dave:
Definitely. Very well said Lauren exactly so. So that’s the first part of the whole process, let’s create that list, and let’s reconnect with them in a way, first before we start talking about exams. Now is an important part there. You need to have, kind of a bridge between the econnection and when you start actually promoting yourself so I call that a transition,the bridge.
We send that out by email, we usually do a short little video snippet. And it might go something like this might be Hey, it’s been really good reconnecting with you over the last week or so. Moving ahead. I plan on doing a much better job of staying in touch and letting you know what I’m up to with real estate investing. Real estate is something that I’m very passionate about. I’ve been doing well with it. And in fact, I think a good real estate deal is the best way for everyday folks like you and like above average return on our money, backed by a solid asset or real piece of property in the future you might even want to partner with me on a deal and share in the profit, and that’s only in your second outreach that you’re doing, but you know what if you’re not interested in real estate, that’s okay too. You can always unsubscribe at the bottom of any of my emails, you’ll be taken off my list immediately. My feelings will be hurt for a little while but I’ll get over it eventually. All right. And in the meantime, if you haven’t had a chance to get back to me let me know how you’re doing. Please hit reply to this email, and let’s catch up.
Lauren:
Okay, cool. Well, I mean, and what’s your open rate there.
Dave::
Well, it’s kind of all over the place but typically these messages because again they’re going out to a small group and going out to people that you have that pre existing relationship with they’re coming out they’re coming as if they’re coming from your, your personal email. We’re seeing anywhere between 40 and 60% open rates.
Lauren::
That’s amazing. Wow, that’s amazing.
Dave::
Now again, it’s not as good as one on one emails, one emails we get pretty much, 100%. But, you know, we want to be systematized. We want to have this set up in automatable fashion.:
So, this is step by step. Let’s go back like the five steps that step one one. That one the whole email thing that creates your list and reaches out to them, that’s step number one step number two is make sure you’re ready to rumble with a good investor presentation I suggest a slideshow. Because that little thing there is not really designed to get people booking meetings with you but quite often that happens so you got to be ready for that. And most capital raisers really don’t know how to do that so wires are not really capital raisers, they’re just people looking for money.
They need to have a well thought out well organized slideshow presentation, like a PowerPoint or Keynote something like that. Get a few practice runs out of your belt with some friendly, you know, people that you’re pretty close to get a little bit of their feedback and then be ready for that. Step number three because we’re running low on time here Lauren. Step number three is all about marketing constant consistent communication; lots of different ways you can do that. Here’s what I want you to remember. Start off, pick one thing, do it consistently. So if you are writing maybe do an easy blog post, whatever. If you’re more comfortable with video do short little video logs. But whatever it is, do it consistently. If you can only go once a month, that’s okay. Ideally you shouldn’t be getting up to where you’re communicating with your list, once a week. Again, it’s all about that consistency but here’s the other important thing about marketing had to learn this the hard way. You need to realize the people you are talking to are not real estate enthusiasts, like we are right.
Lauren:
These are normal mannered people that aren’t. Oh wow,
Dave:
there’s a lot that isn’t that 95% of the population, actually. So, gotta keep that in mind. Keep it Reader’s Digest level which means it’s easy to understand and keep it edutainment, a little bit of education. Hopefully someone entertaining, right, and what they want to know at the end of the day, in order for them to feel comfortable investing with you. They don’t want to know all the stuff they just want to know that you know your stuff that makes sense learning lesson number three get that marketing up and going. A good investor focused website is a really important thing there as well. Step number four is to create some credibility and authority around yourself as a real estate entrepreneur. Now some people say, Dave I’ve only got two or three deals under my belt. Well, that’s okay because 95% of the North American population has never purchased an investment property, their own house doesn’t count on an investment property. So if you’ve even got one deal under your belt, chances are you’re, you’re ahead of 95% of the people on your list so again it’s just about owning that authority. How does that look? Having a good website helps a lot. They’re dressing professionally when you’re talking with people about investing with you, even if they’re friends and relatives that goes along a long way, even getting getting even onto getting interviewed on podcasts speaking of real estate investment clubs, these are all different ways to be seen as an authority, and then step number five we’re flying through this learn but step number five is creating a snowball effect, and you’ve seen this in business. Anybody who’s been in business for a while, definitely sees this, once you’ve got one or two investors on board and they’re happy with how things are going with you. It’s really easy to get referrals and testimonials when you want to get video referrals, or sorry, video testimonials and warm introductory refers that’s what works the best so that’s that’s that five step money partner formula in a very brief nutshell.
Lauren:
I love it, It’s been a full day. I spent a full eight hours in virtual workshops.
And I love the condensed version. Now, where can people reach you, and how can they get access to this amazing five-step money partner formula, and the PDF you have behind you.
Dave:
Yeah, thanks for that setup. That’s lovely. Here’s what they can do, I hope I’ve got a book you can see behind me there money partner formula. I’m happy to give your viewers a free copy of this while it’s not quite free I’ll trade them trade them a copy of my book for their name and their email address so I’ll send them a PDF, and they can get that I’ve spared no expense creating the sign for you learn investorattractionbook.com – you give me your name and your email address. I’ll send over the book to you, that’ll get you in my world. If you want to join us for one of our upcoming virtual workshops, you can do that you can find out all about that you want to watch webinars, you can kind of see the whole thing and in technical or you can do that as well. But that’ll get you into my world. That’s the best way to read.
Lauren:
Awesome Dave it’s really a pleasure. I’m so glad I now know more I mean I’ve watched you obviously think a few times but not directly to me about this model so it’s exciting and find and I think you’ve created a great system to allow and enable people to get into real estate, without using their own money, especially if they don’t have it so great to have you on the show. Thank you so much. I look forward to helping all of your cross border clients as they are investing across borders setting up a structure in the US and creating that model, so that they don’t get hurt, we just use that word, as they’re doing it, and. And it’s really important to be able to have that structure in that person, those people that you can trust, those that that relationship of trust and credibility is super important. Thank you. I wish you a great weekend. I will send you a follow up email as I promised at the beginning, and we’ll look forward to chatting again real soon and hopefully I’ll be able to help you promote some of your amazing affiliate program, virtual programs, and maybe we’ll get you a leg up I absolutely not maybe, I guarantee that we’ll be getting you in as a, as a speaker and as a trainer on our new brand new launch which is creative cross border Academy. So it’s pleasure to be your friend, and to call your friend, stay warm. Stay safe, we’ll talk soon.
Dave:
Thanks very much.
